Daily Media Links 5/28: Hope for the Best, Plan for the Worst, The myth of the ‘real IRS scandal’, and more…

Whether or not orders to use government power to target political opponents originate directly from high-ranking government officials, having a system where this type of abuse is possible is inconsistent with the limits on government enshrined in the Constitution. While we all hope for the best, our founding fathers prudently planned for the worst. Unfortunately, the IRS targeting demonstrates that their fears were not unfounded.

So is the real scandal that 501(c)(4) organizations don’t have to disclose their donors? While it is true that such nonprofits can keep their donors secret, that’s nothing new; the practice has been commonplace for nearly three decades. Nonprofits have long been allowed to keep their donors secret, and they have been allowed to spend money on political advocacy since a U.S. Supreme Court ruling in 1986. No one seemed to mind until, in the wake of the Supreme Court’s 2010 ruling in Citizens United v. FEC, opponents of that ruling rebranded these nonprofits as “dark money groups.”

Then the real scandal must be Citizens United, right? That’s the argument made by Nancy Pelosi, who spun the IRS scandal as a reason for overturning that controversial ruling.

But there’s no scandal there either. First, before Citizens United was decided, the rule it announced — that corporations and unions may spend freely on political speech — was already the rule in a majority of states, and there is no evidence that states that permitted this spending were more corrupt or less well governed than those that prohibited it. Moreover, even if all of the 501(c)(4) spending in 2012 had been funded by corporations and unions, that money would represent a trivial five percent of the total amount spent in the election.

“Right now, we’re entering this document collection phase, interview phase,” Rep. Charles Boustany (R-La.), the chairman of the House Ways and Means Oversight subcommittee, told reporters on Thursday. “And then there will be more hearings in June when we get back.”

“There’s still a lot of staff interviews that are happening behind the scenes right now, lot of things that are going on,” Rep. James Lankford (R-Okla.), a House Oversight subcommittee chairman, said that same day. “That’s all still ongoing next week.”

Sen. Lindsey Graham (R-S.C.) on Sunday called for a special counsel to probe two scandals involving the IRS and the Justice Department, questioning the Obama administration’s ability to police itself.

On “Fox News Sunday”, Graham said an independent counsel should examine the way the IRS’ applied extra scrutiny to conservative groups and how the Justice Department has been investigating journalists working on stories about national security.

The scrutiny has included such tactics as listening to telephone calls between groups and their clients, according to one group’s lawyer. In the case of tea-party organizations, IRS officials studied social-media postings to gauge political activity.

Sometimes the tactic of extra scrutiny for particular kinds of groups seeking tax exemptions helped manage a flood of entities in areas where abuse was common; other times it snagged innocent parties, subjected applicants to long delays and even made IRS employees feel uncomfortable.

The IRS’s recent move to delay and second-guess hundreds of tax-exempt applications from conservative and other nonprofit groups appears to be the most politically tinged use of this model. Who came up with the plan to screen tea-party groups, and why they did so, isn’t yet known.

But a close examination of these groups and others reveals an array of election activities that tax experts and former I.R.S. officials said would provide a legitimate basis for flagging them for closer review.

“Money is not the only thing that matters,” said Donald B. Tobin, a former lawyer with the Justice Department’s tax division who is a law professor at Ohio State University. “While some of the I.R.S. questions may have been overbroad, you can look at some of these groups and understand why these questions were being asked.”

“There is blood in the water and the sharks are circling,” said Jim Manley, who spent years as the top communications aide to Senate Majority Leader Harry Reid (D-Nev.) before moving on to a career at a lobbying firm.

“The last thing the White House needs to do is to make any unnecessary quick moves — by making dramatic personnel changes, for example.”

One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.

In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)

Engle describes Lerner as pro-regulation and as somebody seeking to limit the influence of money in politics. The natural companion to those views, he says, is her belief that “Republicans take the other side” and that conservative groups should be subjected to more rigorous investigations. According to Engle, Lerner harbors a “suspicion” that conservative groups are intentionally flouting the law.

General counsel’s reports composed during Lerner’s tenure at the FEC confirm Engle’s recollections of a woman predisposed to back Republicans against the wall while giving Democrats a pass. Though Noble, then the FEC’s general counsel, is listed as the author of the reports, sources familiar with the commission say that given Lerner’s position, she would have played an integral role shaping their conclusions. “As head of enforcement at the FEC, Lois would have approved the drafting of every general counsel’s report,” Engle tells me.

A judge ruled on Friday that a television series about Brooklyn District Attorney Charles Hynes’s office can air, turning down the legal challenge of a political opponent who said the show is “reality TV” that violates state campaign finance law.